The Chancellor has today announced a reduction in the taper rate in Universal Credit (UC) from 63% to 55%. The reduction will be implemented no later than 1 December 2021.
UC was first introduced in 2013 with the aim being to simplify the existing welfare and benefits system.
There are a number of eligibility criteria for claiming UC. If you qualify for UC you will receive a monthly payment from the government intended to help with your living costs.
There is no set amount for the payment you will receive, it very much depends on your own circumstances. The payment consists of the basic ‘standard allowance’ plus additional elements that are dependent on your circumstances.
Once you earn more than your work allowance your UC payments will be reduced at a steady rate, the taper rate.
The taper rate is currently 63% and as mentioned above this will be reduced to 55%. This means that for every £1 you earn over your work allowance you will be able to keep an additional 8p.
In addition to the reduced taper rate, the amount that households with children, or a household member with limited capability for work, can earn before their Universal Credit award begins to be reduced (the work allowances) is being increased by £500 a year.
Please click here to go back to other Autumn Budget 2021 articles.
